HC notice to Delhi government over BCCI's plea against entertainment tax demand

New Delhi: The Delhi High Court on Monday issued a notice to Sheila Dikshit government on a plea of BCCI challenging its demand for payment of entertainment tax on the money received so far from the sponsors for the IPL and T20 matches held in the national capital since 2008.

A division bench of Acting Chief Justice BD Ahmed and Justice Vibhu Bakhru sought the response of Delhi government by November 12. The court also stayed the tax demand notice till further orders.

The BCCI moved the High Court seeking quashing of the Delhi government notice and subsequent proceedings against it.

The government had asked BCCI to deposit the due entertainment tax with 15 percent interest on the payment received by it from the sponsors of advertisements during the IPL and T20 matches held at Firoz Shah Kotla stadium since 2008.

The Delhi government on January 14 had asked the cricket control body to pay entertainment tax in pursuance of the amendment in the Delhi Entertainment and Betting Tax Act.

The BCCI has sought quashing of the amendment in the act contending it is "unconstitutional as it has been made with retrospective effect".

"This amendment has been made with retrospective effect from April 1, 1998. The amendment now demands that the proprietor should go back in time and collect the tax from persons who may have had sponsorship agreements with the proprietor in the past. This clearly results in an absurdity as it demands the impossible."

The government in its notice had said that during the IPL and T20 matched held in 2012 at the stadium in Dlhi, it was noticed that the logos of DLF, Citibank, Hero, Vodafone etc were displayed in the stadium.

It added that since the BCCI has received payment from the sponsors for displaying advertisements and logos in the ground during the matches, it is thus liable to pay the tax.